Am I economically illiterate?

Ron Baker, the founder of Verasage, wrote this review on his Shelfari page – four stars! My response to his charge of “economic illiteracy” is below.


Monks’ revolt anniversary approaches

A good piece in today’s New York Times about the Burmese military’s efforts to stop any reprise of last year’s democracy protests led by monks. I’ve heard from inside Rangoon that the situation feels extremely fluid.

Taleb on the meltdown

In an interesting post on the current meltdown, the Black Swan author Nicholas Nassim Taleb writes about the lack of business books which admit to difficulty and failure. This leads to charlatans duping people about the probability of success – and worse, contributes to the excessive faith in dumb statistical models at the heart of America’s financial woes. He writes:

“Go to a bookstore, and look at the business shelves: you will find plenty of books telling you how to make your first million, or your first quarter-billion, etc. You will not be likely to find a book on “how I failed in business and in life”—though the second type of advice is vastly more informational, and typically less charlatanic. Indeed, the only popular such finance book I found that was not quacky in nature—on how someone lost his fortune—was both self-published and out of print. Even in academia, there is little room for promotion by publishing negative results—though these are vastly more informational and less marred with statistical biases of the kind we call data snooping. So all I am saying is, “What is it that we don’t know“, and my advice is what to avoid, no more”

I like to think Ahead of the Curve is one book which tries at least to paint the business life in something other than glorious, hand-clapping Technicolor. I think this is partly what has HBS in such a mood.

Thanks Larry Shulman

A review of Ahead of the Curve appeared on Amazon today by the parent of an HBS alumnus. It’s one of the most satisfying I’ve received – not because it’s so nice – but because it focuses on the most important stuff in the book, from my perspective. How do we balance our professional and material wants with our personal, relationship needs? Larry Shulman wrote:

“As the father of a recent HBS graduate, I was drawn into the book to understand more about the inside workings of Harvard. As a graduate of a community college in New York, and the father of eight children, and owner of a 30 year successful technology business, I quickly realized that this book was about true success. The balance of family, love of work, and of course, making a living. The chapters replayed much of what my daughter talked about, but I could now truly understand the life and pressure of those embarking on this trip. It was amazing to hear from somebody almost half my age that he truly understood what most people didn’t.He heard of the loss by those that did not follow their hearts, but allowed the brand they wore to set their direction in life. The guilt I sometimes feel for being a parent that pushed their child to fufill their own dreams is now diminished, since I know, just like Philip chose to stay true to his heart, my child may elect to do the same. This book is not aobut Harvard, it is about life. I want to thank him. Although many books have talked about life-work balance, “ahead of the curve” shows us what we need to consider when raising our children, and helping them in their life choices.”

The meltdown in perspective…

Win Tin being received by friends after his release from Insein Prison

Tremendous news from Burma about the release of Win Tin, the country’s longest-serving political prisoner. Freed after 19 years, he promised to continue his fight “until the emergence of democracy in this country.”

He makes the fuss over the sub-prime bail-out look like so much chin-wobbling opera.

He is now 79 but was first sentenced to jail when he was 60 – for looking after a girl suspected of having an illegal abortion.

Win Tin was one of 9002 prisoners set free, most ordinary criminals allowed out for good behavior.

He once wrote a poem which he gave to a UN envoy who visited him in prison. “Will death be my release? As long as democracy and human rights are not within reach, I decline my release. I am prepared to stay.”

I once reviewed an incredible novel about Burma’s political prisoners called The Lizard Cage by Karen Connelly for the Wall Street Journal…

PEN is hosting a fundraiser tonight in New York for victims of the cyclone which hit Burma earlier this year. The most interesting sounding speaker is U Gawsita, a 28-year-old monk who helped lead the uprising against the government last year and is now in exile.

Gross National Happiness

On Friday, I attended a talk by Bhutan’s prime minister, Lyonchen Jigmi Thinley at the Rubin Museum in Manhattan. The Rubin is in the midst of a fabulous Bhutan program – with exhibits, talks and performances until December. The Prime Minister wore the traditional Goh, a thick embroidered jacket, and spoke about Bhutan’s transition from monarchy to democracy. He also described the country’s policy of Gross National Happiness, which has been well covered in the West – though I hadn’t yet heard such a high-ranking Bhutanese explain it. It came about when the King acceded to the throne in 1972, while still in his teens.

He looked for social models around the world, but found none he liked. He believed that what people wanted more than anything was happiness – things like health, prosperity, education, were simply means to that. Economic development, he saw again and again, was pursued at the expense of the individual. So he made Bhutan’s national goal happiness. Plain and simple.

The four pillars of Gross National Happiness are: the promotion of equitable and sustainable socio-economic development, preservation and promotion of cultural values, conservation of the natural environment, and establishment of good governance.

Measuring happiness, of course, is a challenge. But the Bhutanese, with lots of help from curious well-wishers from abroad, try. Among their findings: rural people are slightly happier than urban people; cultural participation and identity is the strongest determinant of happiness among both groups; religious people tend to be happier.

You can read more about GNH here at the Center for Bhutan Studies site.

Harvard Business School and the financial meltdown

HBS Alumni in the forefront of this economic catastrophe:

George W. Bush – President of the United States (Class of 1975)

Christopher Cox – Chairman of the SEC (Class of 1976)

Henry Paulson – Secretary of the Treasury (Class of 1970)

John Thain – CEO of Merrill Lynch (class of 1979)

Stan O’Neal – Thain’s predecessor at Merrill and the one responsible for the firm’s problems. (Class of 1978)

Andy Hornby – CEO of HBOS, Britain’s biggest mortgage lender, just bailed out. (Class of 1993)

Bush is being Bush. Paulson is doing as well as he can with the terrible cards he’s been dealt. Cox should be whipped out of Washington for not being a tougher enforcer these past few years. Thain was clever to get Merrill the deal he did. O’Neal was a disaster. Hornby appears to be a victim of this 100 year flood.

The most admirable HBS alum in all this is Michael Bloomberg (Class of 1966) who has the rotten job of guiding New York as people lose jobs and tax revenues dry up. Fortunately, he’s the single best advertisement the school has. He made his billions creating value – not simply extracting it like so many of Wall Street’s goons – and has turned out to be a great mayor.

This piece from Bloomberg in April is very telling. Note the quote from HBS professor Scott Snook that one third of Harvard MBA students “can’t really step back and take a critical view. They’re totally defined by others and by the outcomes of what they’re doing.” And Professor Rakesh Khurana: “Business schools as an institution have not effectively addressed this issue of creating a profession that has the capacity for self-regulation.”